Clearing up the HDTV picture

The sharp picture quality that wows you on that expensive HDTV in the electronics store isn't necessarily what you'll see once you get the set into your living room.

In some cases, retailers run video into the sets from closed circuit networks. They do that for various reasons, including wanting to demonstrate the sets' capabilities and keep pranksters from turning to racy programming. But the practice may be distorting consumer expectations, leading to disappointing experiences--and product returns.

"There is no doubt there are higher return rates on HD sets than analog televisions," said Mike Vitelli, senior vice president of consumer electronics at retail giant Best Buy.

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What's new:
Consumers want their HDTVs, but they're not always as happy with their fancy sets as they expected to be.

Bottom line:Creating the ideal HD viewing experience for consumers has posed its difficulties. First off, buyers need to understand that having a TV with a built-in HD tuner only gets them halfway to HDTV heaven. HD service from a cable or satellite provider helps to complete the picture.

The discrepancy in picture quality, however, isn't the only reason customers bring their high-definition TVs back. Some haul their expensive sets home only to get hit by a case of buyers' remorse, Vitelli said. Then there's the issue of video source. "It should almost be illegal to buy an HD set unless you can prove you have HD service," he said.

With shipments of flat-panel televisions expected to more than double in North American markets this year compared to last (and similarly rapid growth expected in coming years), Vitelli and other retail and television service executives don't want to kill the golden goose.

Still, creating the ideal HD viewing experience for consumers has posed its difficulties.

Early on, customer support lines for television set makers, retailers and service operators often shuttled complaining customers back and forth, leaving many wondering if the industry could get its act together to sell to and support HDTV consumers.

More recently, retailers and cable companies have been working in tandem to sell HD products to consumers. Comcast, for example, has been working on partnerships with Best Buy and Circuit City to improve training of their salespeople. Best Buy has been running rebates for cable services with the purchase of new televisions.

The result has been higher subscription rates for HD service. The 800,000 Comcast subscribers who signed up for HD service started when Comcast began working with retail chains to better educate their salespeople.

Still, after spending thousands of dollars on fancy new high-definition televisions, owners commonly don't even watch shows in HD programming, according to Bruce Leichtman, principal analyst at research firm Leichtman Research Group.

"Call it cognitive dissonance or ignorance is bliss, but most households, about two-thirds, aren't watching shows in HD even though they think they are," Leichtman said.

Vitelli isn't surprised. "I would agree with that guestimate without even seeing (the data behind) it," he said.

Ignorant bliss or not, HD television shipments have been soaring. In 2003, 3.7 million digital sets were shipped in North America. That number will more than triple to 14.9 million units by 2005, according to research firm iSuppli.

Halfway to high-def
Fueling the surging demand is consumers' desire for sharp images that only HD sets can display, as well as immense screen sizes that don't degrade picture quality. Access to high-definition programming and broadcasts is a major selling point for HD sets--without it, consumers aren't really getting the high-definition television they paid for.

The high-definition television experience is comprised of an HD set and a service that can display high-definition programming. But consumers can easily confuse either end of that equation--by purchasing a television that can't play HD content
or by not using an HD signal. Manufacturers sell enhanced digital televisions, or EDTVs, which are cheaper than HDTVs and represent a growing sector of the television market. Additionally, HD content is not as abundantly available as digital broadcasts.

The high-definition experience can also include a television with a built-in HD tuner and an antenna for access to over-the-air HD programming in areas where broadcast stations are making it available. (Web sites such as HDTVpub.com have directories showing which markets or cities have over-the-air broadcasts and rating their quality.)

The disconnect between having an HD set and not watching shows in HD, experts say, must be bridged by making it clear that consumers need HD programming--and can conveniently get it.

Dave Watson, an executive vice president at cable giant Comcast, said consumers have access to between 9 and 15 HD channels, depending on the market. While that might not seem like many compared to the more than 250 digital cable channels Comcast offers, consumers seem to think it's enough for now.

"Consumers have expressed the need for more content but most have said they are satisfied with what is available," Watson said.

Consumer confusion
Watson added that while they're pleased with the rapid clip of subscriptions--more than 800,000 of Comcast's 1 million HD subscribers signed up in the last 18 months--he knows the market offers plenty more opportunity. While 93 percent of Comcast's 8.6 million digital-cable subscribers have access to HD service, only 12 percent subscribe.

Confusion is slowing the adoption.

When Comcast asked its customers if you get access by plugging in a cable, "40 percent said they didn't know," Watson said.

For cable providers in particular, HD is a main weapon against satellite television companies.

"We've been a bit of a follower (to satellite) when it comes to new technologies...such as digital-video recorders and services through set-top boxes," Watson said. "Now we're able to lead in innovation."

However, if enough viewers aren't tuning in to that innovation, it won't get too far.

Comcast's Watson also attributes the increase in subscriptions to the cable company's effort to increase the availability of its HD service. "We widen our deployment based on the belief that this is a service consumers want," Watson said, "and we accomplished that."